Pakistan’s leading trade bodies have called on the government to support the construction industry, particularly the cement and related sectors. Syed Mazhar Ali Nasir, the former senior vice president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and vice chairman of the Southern Zone of the United Business Group (UBG), has urged swift measures to revive the construction and housing sectors. This revival is essential to prevent capital flight, unlock an estimated US$100bn in investment potential, and support over 70 industrial sectors linked to construction.
The construction sector is the backbone of Pakistan’s economy but faces numerous challenges. However, the right support can significantly contribute to robust economic growth. Revitalising this sector will also positively impact 70 allied industries, including cement, iron, ceramics, and others, increasing economic activity and creating job opportunities for both skilled and unskilled labourers.
To achieve this, Mr Ali Nasir emphasised the need to reduce the withholding tax on property transactions to encourage investment. He also suggested that the government make the first property purchase tax-free to promote homeownership. Additionally, he called for the elimination of the three per cent Federal Excise Duty (FED), which is unenforceable at the provincial level and hinders sector growth.
In a related concern, Khalid Tawab, the former senior vice president of FPCCI and former chairman of the Iron and Steel Merchants Association, highlighted the troubling decline in Pakistan’s iron and steel production. Recent statistics reveal that steel product production (billets) for 2023-24 is estimated at 4.914Mt, reflecting a negative growth of 7.94 per cent compared to the previous year. This decline is largely attributed to the slowdown in the construction industry, which is a major consumer of steel products.
Junaid Naqi, president of the Korangi Association of Trade and Industry (KATI), has proposed key measures to revitalise the housing sector. According to Mr Naqi, the construction and housing sectors are foundational to Pakistan’s economy, linking to 72 allied industries and providing numerous employment opportunities that drive economic growth. He also recommended that the government reduce the withholding tax on property transactions to one per cent and declare the first property purchase tax-free to encourage homeownership. Furthermore, he urged the abolishment of the three per cent Federal Excise Duty (FED), which unnecessarily burdens the industry.
by Abdul Rab Siddiqi, Pakistan
